June 16 Quizzes Flashcards
What is the order tax legislation passes through the U.S. legislative bodies? 3
1 house
2 senate
3 house-senate joint conference committee
A decedent’s gross estate generally includes all property in which the decedent had…
An ownership interest at time of death
A decedent’s gross estate generally includes all property in which the decedent had an ownership interest at time of death and anything the decedent had power to…
Revoke/terminate
Trusts and estates may have…
NOL deductions
Trusts and estates may have NOL that can be…3
1 carried back
2 carried forward
3 used as a deduction
For the year in which a trust or estate terminates, any remaining unused NOL passes through to the…
Beneficiaries who succeed the assets of the estate or trust
If the seller is not a merchant, when does risk of loss pass to the buyer?
On tender of delivery
Under a notice-type statute, a subsequent purchaser, whether he or she records or not…2
1 Prevails over previous purchaser
2 who did not record before subsequent purchase
A buyer purchased real property from the seller and received a warranty deed with full covenants. Recordation of this deed is irrelevant if the subsequent party claiming superior title had…
Actual notice of the unrecorded deed
What 2 itemized deductions are added back to taxable income to arrive at AMT income before AMT exemption?
1 state and local income taxes
2 Miscellaneous deductions
An accuracy related penalty applies to the portion of tax underpayment attributable to any substantial understatement of income tax and…
Negligence/disregard for tax rules and regulations
In a nonliquidating distribution a partner…2 (losses and gains treatment?)
1 does not recognize loss
2 only recognizes gain to extent money received exceeds basis
In a liquidating distribution, how is land treated?
Land absorbs Reed’s basis in the partnership after adjusting for
Receipt of cash
A cash basis tax payer who died in 2014 was entitled to receive a $10,000 accounting fee that had not been collected before date of death. The $10,000 should appear in…
Both fiduciary income tax return and estate tax return
In a general partnership, all general partners…
Have a right to participate in management
Failing to keep books of account or records will…
Bar discharge of all debts
In terms of social security law, a self-employed person must contribute an annual amount that is…
Equal to combined contributions of employee and employer
A general clause in a deed would…
Have least significance in deciding ownership
In calculating itemized deductions for 2014, what 2 items should be included?
1 taxes withheld in 2014
2 tax deficiency paid in 2014
An accrual basis tax payer, what would they include in rent revenue?
Nonrefundable rent deposits
A married participant in a pension plan, how many deductions are allowed? Why?
Only the wife can deduct (because doesn’t participate)
If an art project with a purchase price of $600 and FMV of $900 is donated, what is the deduction?
$300 = 900-600
What is the calculation for the foreign tax credit limitation?
Foreign tax credit limitation =
(Foreign TI/Worldwide TI) X US tax
When computing foreign tax credit, separate calculations are made using…2
1 Other foreign source taxable income
2 foreign Nonbusiness related interest earned
What is the classification of Land operated as a parking lot and a shed on the parking lot?
Both are section 1231 assets
If a partner sells his partnership interest to an outsider for $68,000 cash and is relieved of a $3,000 liability, what is the total amount realized by the partner?
$71,000
Alternative minimum taxable income before the adjusted current earnings (ACE) adjustment includes an adjustment for…
Tax exempt interest taking on private activity bonds
If there is taxable income of $500,000 and income tax of $100,000, what is the maximum amount of accumulated taxable income that may be subject to accumulated earnings credit?
$150,000 = $500,000-$100,000-$250,000
When Adam opens a joint account with his son’s friend with $70,000 deposited into it. There is a gift when the son’s friend…
Withdraws money from the account for his own benefit
National Environmental Policy Act enforcement is primarily accomplished by…
Litigation of persons who challenge government decisions
An oral agreement that would be binding without consideration would be…
An agreement that modifies an existing sales contract
A subsequent bonafide purchaser would take the property over…
A previous mortgage holder who fails to record
A bank penalty, what is its tax treatment?
Can be deducted from gross income in arriving at AGI
In computing PHC tax consent dividends that are not paid are…
Deductible
In a recapitalization, in which stock is exchanged for stock and bonds, there would be a recognized gain for…
2) why?
Bonds
2) bonds are considered boot
